Ashish Dhawan ChrysCapital Portfolio Of Flop Stocks

Ashish Dhawan may have paid a steep price for choosing to invest in “potential multibaggers” instead of in top-quality names offering an assured return. The “potential multibaggers” have all turned out to be flop stocks and ruined his portfolio. There is a message in this for all investors wanting to get rich in a hurry

Ashish Dhawan of ChrysCapital has a portfolio worth in excess of Rs. 265 crores. He made money early in his career by being the early investor in stocks like Axis Bank (then UTI Bank), Yes Bank and Shriram Transport Finance and Mphasis which became super-duper multibaggers and made him a lot of money.

A study of the present portfolio reveals that there are no top-quality names there. Instead, Ashish Dhawan appears to have preferred to invest in what were then supposed to be “promising” stocks but which have gone nowhere. Sasken is a good example of this where Ashish Dhawan has invested Rs. 28 crores. Sasken was touted as the leader of the telecom software revolution and expected to be a multibagger several times over. It attracted investment from top-notch investors like Goldman Sachs, Citigroup, Nortel Networks & Asit C. Mehta. However, the stock has been a huge disappointment giving negative returns over several years. The only reason it is tolerated is because of high dividend yield of 5% +.

Orient Green Power, in which Ashish Dhawan holds 21.85 crores of stock, is another example of a stock that has been a total disappointment. Over the several years, the stock has just given negative returns.

Mastek, in which Ashish Dhawan’s present holding is worth Rs. 30 crores, is a third example of a worthless stock that has gone nowhere but down in the dumps.

Ashish Dhawan bought Allsec Technologies in November 2007 at the price of Rs. 125, resulting in a loss of 74% of his capital. In Four Soft also, Ashish Dhawan would have suffered a loss because that company has gone only way and that is down.

Ashish Dhawan ChrysCapital Portfolio

Company

Nos of shares

Price (Rs)

Present Value (Rs)

Greenply Industries

28,69,488

254

72,88,49,952

JB Chemicals

32,88,266

69

22,68,90,354

Sasken Communication Technologies

22,32,630

129

28,83,96,270

Take Solutions

62,24,366

39

24,27,50,274

Orient Green Power Co

1,98,66,579

11

21,85,32,369

Mastek

23,18,259

132

30,60,10,188

Nahar Industrial Enterprises

25,90,124

35

9,06,54,340

Rico Auto

72,73,092

11

8,00,04,012

Unity Infraprojects

14,27,925

48

6,85,40,400

Apar Industries

4,03,960

180

7,27,12,800

Eon Electric

13,50,000

35

4,72,50,000

Consolidated Construction Consortium

30,37,304

14

4,25,22,256

SPML Infra

5,48,999

69

3,78,80,931

Gayatri Projects

312,869

113

3,53,54,197

Megasoft

35,54,769

11

3,91,02,459

Genus Power Infrastructures

22,84,520

9.34

2,13,37,416

Lakshmi Energy and Foods

11,50,500

19.15

2,20,32,075

Sunil Hitech Engineers

2,45,000

66.20

1,62,19,000

Logix Microsystems

7,66,044

19.60

1,50,14,462

ALLSEC Technologies

10,75,115

33

3,54,78,795

Four Soft

13,99,999

8.75

1,22,49,991

Cyber Media (India)

479,700

11.55

55,40,535

Total Value of the Portfolio

265,33,23,077

Ashish Dhawan has also been selling a lot of worthless stocks. He sold 108213 shares of Welspun Global Brands at Rs. 36.34 (market price is Rs. 43.40) & 77500 shares of Welspun Investments and Commercials at Rs. 20 per share.

In Kajaria Ceramics, Ashish Dhawan made a bit of money. He bought 10,25,199 shares in September 2010 at the price of Rs. 71 each and sold off the entire holding in May 2012 at Rs. 158, netting a cool profit of Rs. 8.91 crores (122%) in just 18 months. However, if Ashish Dhavan had waited a bit more, he would have got Rs. 217 per share, taking his overall profits to about Rs. 15 crores. This means Ashish Dhavan lost out on 6 crores of profit. Of course, it is easier to be wiser after the event!

The other surprising thing is that while Ashish Dhawan has sold off all of his winning stocks (Yes Bank, Axis Bank, Shriram Transport and even Kajaria Ceramics), he has held on to the trash stocks like Sasken, Mastex, Four Soft etc even though the losses havw continued to mount. It is almost as if he had an “aversion to book losses“. This behaviour also goes against the conventional wisdom of “Water the flowers & cut the weeds” (ride the winners while dumping the non-performers).

In hind sight, Ashish Dhawan would have been much better off if he had gone the Rakesh Jhunjhunwala route and invested in top quality names like HDFC Bank, Titan Industries & Page Industries. His portfolio would have been several times larger now if he had done that.

The take-home point is that all of us investors also make the same mistake. I, myself, invested large sums in rubbish stocks like Ankur Drugs, Ganesh Ecosphere, IVRCL Infra and many others in the hope that they would become “multibaggers”. That never happened and the stocks lost huge value. If I would have had invested the same money in top quality stocks, I would indeed have had my multibaggers. A lesson learnt, though a costly one.

Like how you can’t judge book by its cover, you can’t judge company by its stock price. Companies like allsec and foursoft are sound companies with specialized services for specific market. There would be reasons why they are unable to make profits but that doesn’t discount their potential.

As a investor you judge market potential and possible position/weight/value of company within that market. So if you understand potential of organized BPO segment and organized specialized ERP segment then probably you would be able to appreciate value that allsec brings to BPO segment and value that foursoft bring to specialized ERP segment.

Your whole article is talking merely about stock prices and not necessarily company fundamentals. You seem to be discounting company value/potential simply based on their stock price movement.

But, is not the proof of the pudding in the eating? Yes, you may have great looking plans on paper but if you haven’t been able to deliver, aren’t you a flop stock. The bottomline is how much money you have made your shareholders over a period of time. Its’ been several years now. At some stage it may be important to realize that the plans you see on paper may not materialize in reality and to cut your losses.

I agree all plans look good on paper only. Cos making humble chaddi-baniyans (page indus) or pressure cookers (ttk prestige) or battery (amara) are multibagger. these co like Four Soft and sasken are good for talk only but not for performance.

Well we see that even the worshipped greats make blunders. So where does the top notch education go and why do they falter?
Even lesser mortals like us can sometimes do wonders with that kinda cash sitting in our kitty
As we say some things are subjective like market view and choices of sectors and companies.
So in the end it all actually trims down to something which is not exactly in our hands.

He is a great mind in the investment, majority of the above stocks are multi-baggers (as of FY 2015). The biggest weight in the portfolio ‘Greenply has gone up by 2.79x and still he owns around 11%. Totally the above portfolio now worth around 747 Crores i.e. it has appreciated around 195.3% (Not adjusted to splits ex: Palred capital reduction and Dividend reinvestment)

After lot of research and personal experience, I have shortlisted these stock advisories for long term investments. Have very good experience with all of them. You can choose yourself : 1. PA Wealth Advisors ( www.pawealthadvisors.com ) 2. Stock Axis (www.stocksaxis.com) 3. Stalwart (www.stalwartvalue.com)

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